Incoming e-Invoice Suite Solution Ariba

Legal Eletronic Invoice Brazil

SAP FORUM - 2014
Legal Invoice Program in Brazil
With some of the strictest legislation worldwide, Brazil achieved alone in 2010 the same volume of
electronic invoices (B2B and B2G) as all the European countries put together. E-Invoicing is mandatory
in Brazil and an important vehicle for real-time audits by the government.

A new real-time compliance process requires companies to send digitally signed original invoices to
the Ministry of Finance (SEFAZ) in a specific XML format (NF-e) for review and approval before
shipment. If police or Customs Officials stopped a delivery truck and there was any discrepancy
between the bill of lading (DANF-e) and the authorization on file in the SEFAZ database, the company
could face severe penalties or fines.

Each state has its own tax legislation regulated by the State Tax Authority (best known as “SEFAZ”).
All 27 Brazilian states have signed the Protocol ICMS 88/07 to adopt the eInvoicing system. Since
December 1st, all states are operating the system through an agreement known as “SEFAZ Virtual”.

Brazilian companies now face a second wave of regulatory change that adds more real time reporting
requirements and increases the chance that an invoice could be rejected and hold up shipment. The
new regulations cover areas such as additional fields, additional codes, additional SEFAZ side
validations, and changes to contingency mode operations.

To issue a NF-e a company has three options:

o Build its own application;
o Purchase an application (Oursourcing is allowed), or
o Adopt the free solution developed by SEFAZ

© 2013 SAP AG. All rights reserved. 2

How does NFe work?
1.The eInvoice XML file is created and signed by the Supplier (digital stamp);

2.The XML file then is transmitted the to the state Ministry of Finance (Secretaria da Fazenda or SEFAZ) for
review and approval.

3.SEFAZ validates the file and issues an authorization for use. This prior authorization is needed for the
transportation or removal of goods from the facility where the goods are located.

4.An Authorization Protocol and Access Key (44 digits) are delivered by SEFAZ

5.Once approved, the official NF-e file is transmitted back to the company for archiving for up to 5 years.

6.Then it is e-mailed to the receiver for tracking and awareness while they wait for delivery.

7.A copy of the XML NF-e must also be converted into a human readable format called a DANFE which must
be printed and carried as part of the documentation pack accompanying the shipment.

8.Atany point along the way, the truck can be pulled aside by police or customs officials, who will scan the
barcode on the printed DANFE to validate that the goods movement has been sanctioned by the
government. There are additional responsibilities and requirements at the receiver’s end as well.

9.After receiving the NF-e file, as a part of its receipt process, the buyer must access the SEFAZ database to
verify the validity of the eSignature, the authenticity of the digital file and the authorization to use the
electronic Invoice.

10.Bookkeeping

© 2013 SAP AG. All rights reserved. 3

Brazilian Electronic Invoicing Model

Certifying
Entity
ICP-Brasil

Digital Certificate

Goods
3 DANFE + A.P. 5 Reception

Vendor
DANFE +A.P Buyer
Carrier
Customs

4
2 SEFAZ Check NFe
approval 6 NFe confirmation
1 XML signed 7 Goods Receipt Confirmation
to be authorized SEFAZ
(waiting final regulation by government)

SEFAZ = Tax Authority (State)

DANFE = Printed Document (for transportation purpose)
© 2013 SAP AG. All rights reserved. 4
Aribas´s Strategy

•Our focus primarily has been on supporting the automation of

incoming e-invoices processing in large buyers using Ariba Network.

•Given the mandatory in Brazil, a large volume of electronic documents

comes from sellers who use their own or third party solutions . Then, our
solution must be prepared to receive and validate documents of different
origins.

•So as to ensure results in the short term, Ariba proposes a gradual approach
that considers management of suppliers. Our key differentiation from
competition is to deliver the Invoice data into Buyer ERP system, avoiding or
minimizing manual input.

•Due toAG.the
© 2013 SAP complexity
All rights reserved. of the Brazilian requirements and the fact that our 5
Suite Solution Ariba (NFe and Cte)

Invoice Management
(Exception handling)
Full
Basic
Invoice LEGAL COMMERCIAL
Archiving Solution
Solution
Validations And
Outbound Validations
Printing
(ERP)

Business Rule Engine

(BRE) Adiciona-seare
e-Invoices a solução:
received
- Incoming
by Ariba viae-invoices
e-mail, are legally
validated against
transformed SEFAZ;
to a standard
- They are
format alsoand
(xCBL) commercially
finally sent
NF-e /CT-e Transport validated
to (BRE);
the Buyer´s ERP.
(Transformation NF-e → xCBL) - Exceptions are handled in our
Invoice Management Module.
- Electronic invoice repository are
into Archiving and Printing
Module (NF-e, DANFE, Cte, DACTE;

© 2013 SAP AG. All rights reserved. 6

Incoming XML Flow (Legal and Not Legal e-Invoices)

Buyer ARIBA

Middleware Middleware

Middleware

© 2013 SAP AG. All rights reserved. 7

Some Key Questions

• Monthly volume of incoming invoices

• Type of invoices: Goods, Services, Non-PO, etc.
• Will Air Product use a SAP Central instance or they are going to have a Brazilian
Instance?
• Do they have Government Risk Compliance module to store legal invoices?
• Do they want Ariba to check if sellers invoices are valid against SEFAZ (Brazil Tax
Authority) before forwarding it to SAP?
• Do they want us to store the legal invoices or they want to deliver it inside SAP ERP
without manual typing (this would be a much more complex solution)?

© 2013 SAP AG. All rights reserved. 8